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Letter from the Parliamentary Ombudsman, Ann Abraham, to MPs
24 November 2004
Dear Member
EQUITABLE LIFE INVESTIGATION – PROGRESS REPORT
I am writing in relation to the further investigation into the prudential regulation of Equitable Life, which I announced I would conduct in a report to Parliament on 19 July 2004.
Progress to date
Since that report, there have been a number of important developments.
First, the Government Actuary’s Department’s actions in relation to the prudential regulation of insurance companies in the period prior to 26 April 2001 have been brought within my jurisdiction through the Parliamentary Commissioner Order 2004, which has had effect since 15 November 2004.
Secondly, I have put in place a dedicated team of investigators, led by Iain Ogilvie, to undertake the investigation. The team’s contact details are provided at the end of this letter.
Thirdly, we have taken possession of the entire Penrose Inquiry evidence archive and also obtained other relevant evidence, including the policy and operational files of the Principal Civil Service Pension Scheme administrators for whom Equitable Life provided an additional voluntary contribution scheme. Work is already underway to analyse the evidence we have obtained.
Fourthly, the investigation team has met with four policyholder action groups to discuss the selection of individual representative complainants and the terms of a statement of their complaints, which will be issued to the bodies under investigation for their formal response. These discussions are at an advanced stage and we hope to be able to finalise and issue the statement of complaint within the next week.
Fifthly, my staff have met with the bodies under investigation to discuss the procedure for conducting the investigation and I have also met the Chairman and Chief Executive of Equitable Life. I have received assurances of their full co-operation with my investigation.
Finally, we are in the process of establishing an Advisory Panel to provide technical and professional assistance to the investigation from January 2005. I will provide more details about this once I am in a position to do so.
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Other issues
There are five other issues to which I would draw your attention.
1. Time period to be covered by the investigation
In my report to Parliament, I said that I was minded to focus the investigation on the events relevant to the Society’s closure to new business as it was in those events that it appeared that the roots of the injustice claimed by policyholders and annuitants lay. I also said that I would reflect further on these issues.
Having considered this issue further, I remain convinced that it would be inappropriate to fetter my investigation by placing an arbitrary start date on the time period to be covered, which might limit unwittingly now what we were able to look at during the investigation or which might otherwise constrain it unnecessarily.
Therefore, I do not propose that the investigation should have a specific start date, although it must conclude with 1 December 2001 as from this date I have no jurisdiction over the regulators of Equitable Life. Rather, the investigation should be left free to examine whatever is relevant – in whatever period and as far back as is necessary – so as to ensure that I am able to determine whether maladministration has caused injustice to policyholders and annuitants.
2. Evidence for the investigation
I have been asked to clarify whether policyholders, annuitants, former policyholders or others with an interest in my investigation need to submit evidence to me through a Member of Parliament. We are happy to receive information and evidence direct from anyone who can provide it, in addition to any evidence Members may wish to submit, either personally or on behalf of their constituents. I should emphasise, however, that the focus of my investigation is not on the individual circumstances of policyholders – complaints about mis-selling of insurance policies are for the Financial Ombudsman Service – but on the actions of the prudential regulators and GAD in relation to the regulation of the Society.
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3. Further referrals of complaints
I have also been asked whether it is necessary for individuals who have not yet done so to have their complaint referred to me in order for them to be covered by any findings I may make as a result of my investigation.
I can confirm that, in situations such as this where I receive many complaints about essentially the same matters, the findings and any recommendations I might make as a result of an investigation will address the situation of all those who have complained to me as well as all the other people in similar positions to those complainants.
There is therefore no need for individuals to register their complaint with me in order to be covered by the outcome of my investigation, although we are happy to receive further referrals, which would be held on file pending the outcome of the investigation.
4. Completion of the investigation
I hope that you will understand that I cannot commit to a specific completion date at the outset of such a very complex investigation that will undoubtedly require detailed consideration of a considerable amount of documentary evidence related to the regulation of the Society over many years. I am conscious that to do so may raise the expectations of the many people awaiting the results of the investigation.
However, I recognise that this investigation should as soon as possible bring finality to the situation policyholders and annuitants find themselves in, while having due regard to the need for rigorous and effective scrutiny of all of the relevant material and critical issues that such an investigation will involve.
We therefore hope to complete the investigation during 2005 and we will do everything we can to ensure that we do so in the shortest time possible.
5. Further information
I hope to be able to publish relevant information about the investigation, including the statement of complaint once agreed, on my Office’s website in the near future and will keep you informed of further progress.
In the meantime, the investigation team may be contacted at:
The Equitable Life Investigation
18th Floor
Millbank Tower
London SW1P 4QP
Tel: 0207 217 3904
Fax: 0207 217 4160
Email: equitable.report@ombudsman.org.uk
I hope that the above is helpful
Yours sincerely
Ann Abraham
Parliamentary and Health Service Ombudsman
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